LONDON (MNI) – A team of economists from the Construction Products
Association will meet the Bank of England’s Chief Economist Spencer Dale
on June 1 to discuss the “serious doubts” they have about the accuracy
of National Statistics’ construction data.

CPA Chief Executive Michael Ankers wrote to the BOE following the
release of Q1 GDP data which showed construction output fell 4.7% in Q1.

In an interview with Market News International, Ankers said that
the data sat uncomfortably both with industry survey data and anecdotal
evidence.

“There is something really quite concerning about the accuracy of
the data. It’s not suprising construction fell in Q4 of 2010 but a fall
in Q1? That’s hard to get your mind around,” Ankers said.

“Those figures are just not consistent with what industry surveys
show or what we’re hearing anecdotally. We think construction was flat
in Q1, at worst, perhaps it was up a little even, it was certainly not
down 4.7%,” he said.

“It is not consistent with information from construction industry
surveys of the companies and sectors that the Association represents,”
he added.

Ankers said that the CPA regularly meets with construction industry
leaders, many of whom have voiced concerns about the data’s accuracy.

“Anecdotal evidence just doesn’t back it up either. The weather was
exceptionally good for construction in Q1, it couldn’t have been better,
it just can’t have been down that much,” he said

“Yes, 2009 was dire. But the ONS said construction then grew 7% in
2010. We had a meeting with some of the leaders of the biggest
construction companies in the UK. We asked them to put their hand up if
their company saw more than 6% growth in 2010. Nobody put their hand
up,” he said.

“The head of Kier (one of the UK’s leading construction companies)
is on record as saying the data is “baloney”,” he added.

The first estimate of Q1 GDP showed construction fell 4.7% on the
quarter, following a 2.3% drop in Q4. The result was greeted with
skepticism by analysts, as exceptionally poor weather at the end of 2010
was expected to have hit Q4 construction hard. This should, in turn,
have boosted quarterly Q1 construction activity.

The impact of the fall in construction on overall UK GDP was
substantial. UK Q1 GDP rose 0.5% on the quarter, having fallen 0.5% in
Q4. Construction knocked 0.3 percentage points off the quarterly Q1 GDP
growth rate, the largest single downward impact on GDP.

In its February Inflation Report, the Bank of England’s implied Q1
GDP forecast was for 0.8% quarterly growth – if there had been no
negative impact from construction the BOE’s forecast would have been
accurate.

The Office for National Statistics is undertaking a review into
potential problems with the apparently backdated responses construction
sector participants are providing to its surveys. Some analysts warn,
however, that there may be other problems with the extremely volatile
construction numbers.

After the ONS took responsibility for the construction data it
implemented a string of methodological changes which came into effect in
2010.

The CPA claims to represent 85% by value, of all manufacturers and
suppliers of construction products in the UK, including 24 of the
largest companies in the industry, as well as 44 sector trade
associations.

–London newsroom: 00 44 20 7862 7492; email:
wwilkes@marketnews.com/drobinson@marketnews.com

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